Monday, July 25, 2016

As we were wrapping the final day of the MSU Food Law
Current Issues seminar, Congress finally passed a GMO
labeling bill,[1] S.
764, 114th Cong. (2016). I would be
remiss if I didn’t delve into it a little bit.

The bill and labeling
issues in general were a hot topic at the seminar. Rather than delve into the
political controversies, I am going to draw on the seminar discussion to
explore the legal issues that I see in specific provisions in the bill.

Of course, the big news and the reason the bill has just
been enacted is that it preempts state labeling requirements. It states:

‘‘FEDERAL PREEMPTION - No State or a political subdivision of
a State may directly or indirectly establish under any authority or continue in
effect as to any food or seed in interstate commerce any requirement relating
to the labeling of whether a food (including food served in a restaurant or
similar establishment) or seed is genetically engineered (which shall include
such other similar terms as determined by the Secretary of Agriculture) or was
developed or produced using genetic engineering, including any requirement for
claims that a food or seed is or contains an ingredient that was developed or
produced using genetic engineering.” S. 764, 114th Cong. § 295(b) (2016).

You may remember from my
discussion of the GMA’s suit over Vermont’s GMO labeling bill litigation
that there are three basic types of preemption: express, field and conflict.
This is an express preemption.

Before anyone gets overly excited though, the bill has an
exception to this preemption. S. 764, 114th Cong. § 296 (2016) states ‘‘Nothing
in this subtitle, subtitle E, or any regulation, rule, or requirement promulgated
in accordance with this subtitle or subtitle E shall be construed to preempt
any remedy created by a State or Federal statutory or common law right.” So the
law doesn’t preempt causes of actions a citizen might bring under state
consumer protection laws. That means
claims alleging consumer misrepresentation for things like “100% natural” and
“all natural” and other terms where consumers object to the use of GMOs in a
product are not preempted.

The bill, of course,
defines what bioengineering is with respect to food. It is food.

“(A) that contains genetic material that has been modified
through in vitro recombinant deoxyribonucleic acid (DNA) techniques; and

(B) for which the modification could not otherwise be
obtained through conventional breeding or found in nature.” S. 764, 114th Cong.
§ 291 (2016).

This has two regulatory issues. First, this requires trying
to prove a negative – that something could not otherwise be obtained through
breeding or found in nature. This is a difficult, if not nearly impossible,
task. USDA can try to set a standard for establishing the negative, but I would
bet this will end up in litigation.

The definition also means there are a lot of foods that will
likely not be required to have a GE label because they do not contain any GE
DNA, even though a GE was used in the production of the product. For instance,
cheeses often contain rennin that is produced by GE fungi, citric acid is
produced from a GE mold, and any number of products from GE crops may be so
highly refined that there is no genetic material left (more on this last point
later).

Another use of GE crops in the food system is as feed for
animals. The law explicitly addresses this by prohibiting animal-derived foods from
being a GE food just because an animal consumed GE feed. S. 764, 114th Cong. §.
293(b)(2)(A) (2016).

Interestingly, authority for establishing the mandatory
labeling requirement is assigned to the USDA. S. 764, 114th Cong. § 291(3) (2016)
states that "Secretary" means the secretary of agriculture, and S. 764, 114th
Cong. § 293(1) (2016) states that the Secretary shall ‘‘establish a national
mandatory bioengineered food disclosure standard with respect to any
bioengineered food and any food that may be bioengineered.”

However, under Sec 292, the law will only apply to foods
that are regulated under the Food, Drug and Cosmetic Act (which, you should recall,
are regulated by the FDA under 21 U.S.C. § 321(d)). If it’s a product subject
to the Federal Meat Inspection Act (21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (21 U.S.C. 451 et seq.), or the Egg Products Inspection
Act (21 U.S.C. 1031 et seq.), the GE
labeling bill will apply if “the most predominant ingredient of the food would
independently be subject to the labeling requirements” of the FDCA. S. 764, 114th
Cong. § 292(c)(2) (2016). If the product is broth, stock, water, or a similar
solution, then the GE labeling will only apply if the second most prominent
ingredient would be required to be labeled under the FDCA. S. 764, 114th Cong.
§ 292(c)(2) (2016).

So read here: this only applies to FDCA regulated foods, or
meat, poultry, and egg products if the first ingredient on its own would be
subject to FDCA labeling requirements or liquids if the second ingredient on
its own would be subject to FDCA labeling requirements. Yet now USDA is going
to be responsible for developing and enforcing labeling regulations. If you’ve
taken U.S.
food law, you will realize this adds regulatory confusion to an already
chaotically organized food regulatory regime in the U.S.

For highly refined products, there’s an additional issue
that the law allocates to USDA for resolving. ‘‘A regulation promulgated by the
Secretary in carrying out this subtitle shall …‘(B) determine the amounts of a
bioengineered substance that may be present in food, as appropriate, in order
for the food to be a bioengineered food.” S. 764, 114th Cong. § 293(b)(2)
(2016). So basically, USDA will have to answer the question “What is the
threshold level that will trigger the requirement that the food must be
labeled?”

This threshold issue also applies for labeling of grains
that have been inadvertently commingled with a GE grain. So, for instance,
corn, soy, wheat, and oats are often grown in rotations and handled through the
same supply chain. This is so common that USDA commodity grading standards have
established allowable thresholds for the presence of other grains in the
commodities, 7 C.F.R. §§ 810.101 et seq.

Issues with comingling and cross contact have been coming up more with allergens and
gluten-free labels. For instance, oats are a non-gluten containing grain that should
be able to be labeled gluten-free under FDA’s labeling rules. However, they
sometimes contain gluten due to cross-contact in the supply chain. FDA addressed
this by establishing a threshold for gluten-free labeling claims that allowed
up to 20 ppm gluten in products and ingredients under certain conditions. 21
C.F.R. § 101.91.

How much cross-contact will a company have to prevent if
it's not going to label its product as having a GE ingredient? The USDA’s
answer to the threshold question will help companies navigate this.

Just because a food isn’t required to have an affirmative GE
declaration does not mean that it can be labeled as non-GE. For GE ingredients,
the bill states “food may not be considered to be ‘not bioengineered’, ‘non-GMO’, or any other
similar claim describing the absence of
bioengineering in the food solely because the food is not required to bear a
disclosure that the food is
bioengineered under this subtitle.” S. 764, 114th Cong. § 294(c) (2016). Going
back to an earlier point about preemption, even if a company complies with this
prohibition, it doesn’t mean consumers may not bring some other misleading
labeling claim under state law. If a food contains GE ingredients below the
mandatory labeling threshold, but uses a marketing term that a consumer
interprets to mean it is GE-free, this would potentially expose the company to
litigation liabilities.

The bill does have a little savings clause for organic
foods. Being certified as Organic under the Organic Foods Production Act of
1990 (7 U.S.C. 6501 et seq.), will be considered sufficient to make a claim
such as “non-GMO” or “GMO-free” claim. S. 764, 114th Cong. § 2 (2016).

If you’ve followed the news coverage, you should also know
that the bill is set up to allow manufacturers to label their product with text
or a digital link (i.e. QR code), with some additional potential labeling
options for particularly small packages and small companies. S. 764, 114th
Cong. § 293(d) (2016).

In terms of enforcement, that too will fall to the USDA. The
bill actually amends the Agricultural Marketing Act of 1946 (AMA) (7 U.S.C.
1621 et seq.). S. 764, 114th Cong. § 1 (2016). If you’re not familiar with this
law, you should go explore it a little. The law is about giving the USDA
powers to develop and manage agricultural markets. Here’s an excerpt from the
congressional declaration of purpose, 7 U.S.C. § 1621:

... it is the intent of Congress to provide for (1) continuous
research to improve the marketing, handling, storage, processing,
transportation, and distribution of agricultural products; (2) cooperation
among Federal and State agencies, producers, industry organizations, and others
in the development and effectuation of research and marketing programs to
improve the distribution processes; (3) an integrated administration of all
laws enacted by Congress to aid the distribution of agricultural products
through research, market aids and services, and regulatory activities, to the
end that marketing methods and facilities may be improved, that distribution
costs may be reduced and the price spread between the producer and consumer may
be narrowed, that dietary and nutritional standards may be improved, that new
and wider markets for American agricultural products may be developed, both in
the United States and in other countries, with a view to making it possible for
the full production of American farms to be disposed of usefully, economically,
profitably, and in an orderly manner.

The GE bill makes failing to make a required disclosure a
prohibited act and requires companies to maintain and make available to the USDA
any records that the USDA decides to require. S. 764, 114th Cong. §§ 293(g)(1)-(3)
(2016). USDA’s enforcement authority of the labeling is limited to inspection
of the records and publicizing a summary of the records audit (after a notice
and hearing with the person who was the subject of the record). S. 764, 114th
Cong. § 293(g)(3) (2016). The bill explicitly prohibits the USDA from requiring
a recall of a mislabeled product by stating “The Secretary shall have no
authority to recall any food subject to this subtitle on the basis of whether
the food bears a disclosure that the food is bioengineered.” S. 764, 114th Cong.
§ 293(g)(4) (2016).

Normally this would seem like weak enforcement authority
that undermines the potential effectiveness of a bill. However, the
non-preemption of state causes of action for consumer deception means citizen
suits through civil litigation will augment the USDA’s enforcement authority.
In the same way that bloggers are testing gluten-free products and publicizing
if they contain gluten (even when within the 20 ppm allowed by the FDA),
citizens can test, publicize, and litigate any product that fails to accurately
disclose the presence of GE ingredients in the food.

So that’s the fun new permutations of labeling law that
we’ll have in the U.S.

So remember, understanding this law (like all laws)
will require analysis of the codified statute, the regulations, and any case
law, as well as synthesizing interpretations of overlapping and related
statutes, regulations, and case law.

[1]
For any of you working on your legal research skills, here’s a fun issue you
should note. The bioengineered labeling bill is titled “A bill to reauthorize
and amend the National Sea Grant College Program Act, and for other purposes”.
Say what? Congress has a little switcheroo maneuver that they pull sometimes,
where they completely substitute the text of one bill for another. This can
make it difficult to find the original text of a bill if you’re only searching
by what you think the name is. Sometimes you’re better off searching by the
bill’s number or sponsors’ names.

Thursday, July 14, 2016

Some of the participants at the MSU Food Law Current Issues Seminar happened upon a trivia contest at dinner. By chance, the first category was “food.” Needless to say, they slammed the competition! They won the shirt displayed in the photo.